South Africa’s Actual Retirement Age

Knowing how to plan for your future is an important thing. Especially as you start to grow old – when those grey hairs start peeking out from the side of your hairline, it’s time to start planning for your retirement. If not sooner.

To do that, it’s vital to know what the actual age of retirement is. Otherwise, how can you plan accordingly?

The thing is, lately, there have been news articles circulating both online and on social media that have many people quite confuzzled. Articles as seen on both Zerode and GCCE2024 have made claims that –

“South Africa is set to undergo significant changes to its retirement age policies in November 2025, affecting millions of workers and retirees. The government has announced new retirement rules aimed at addressing economic pressures and improving social security stability. These reforms will impact both public and private sector employees, with adjustments to pension eligibility and early retirement options”.

And this has had a lot of South African’s asking the question – what actually is the retirement age?

Fake News Debunked

Various online news publications like News24, the Daily Maverick, iol and MSN have all published articles stating categorically that the fake news regarding a change in the retirement age is entirely false –

“South African law does not prescribe a universal retirement age. In the private sector, retirement age is defined by employment contracts or pension fund rules. In the absence of such terms, section 187(2)(b) of the Labour Relations Act provides that dismissing someone for age is only legally fair if they’ve reached the “normal or agreed retirement age” for their role.

In the public sector, the governing legislation is the Public Service Act of 1994, which sets the normal retirement age at 60 and allows early retirement from 55. These provisions remain unchanged”.

And this remains the status quo.

In fact, it is common knowledge that South Africa has never had a mandatory national retirement age. If there’s no agreed upon retirement age in the employment contract or pension fund policy, forcing an employee out of their job at 65 could amount to automatically unfair dismissal. It’s important to note that the retirement age is not dictated by what’s common practice in the industry.

What dictates the retirement age comes down to what is agreed upon in the employment contract. In other words – if it isn’t contractually agreed, an employer could be exposed to the employment of an employee that never ends.

Retirement Age is as Agreed Upon

For Private Employees

As we stated briefly above, South Africa does not have a mandatory national retirement age. For the majority of employed workers, the age they retire is as agreed upon in their employment contracts (i.e. it is as stated in writing) or is as dictated by their pension fund policy.

However, terminating an employee’s employment after they have reached retirement age has historically been a difficult scenario for employers to navigate and has led to a number of legal challenges. These challenges have arisen in the context of section 187(1)(f) read with section 187(2)(b) of the Labour Relations Act, 1996 (LRA). In terms of these sections, a dismissal based on age will be automatically unfair (and constitute unfair discrimination), unless it can be shown that the employee has reached the normal or agreed retirement age for persons employed in that capacity – either because it is contained in the employment contract or because it is contained in the company’s retirement policy or pension fund policy.

Case law

The Labour Appeal Court (LAC) confirmed the legal position regarding terminating employment after reaching the age of retirement read in conjunction with Sections 187(1)(f) read with section 187(2)(b) of the LRA in the matter of Motor Industry Staff Association (MISA) and Another (Landman) v Great South Autobody CC t/a Great South Panel Beaters.

·       Background - the employee commenced employment with Great South Panel Beaters (GSPB) during November 2007. The parties entered into a written employment contract that provided that the employee’s retirement age was 60. He turned 60 on 15 March 2018 but continued working. Neither party raised the issue of the employee’s retirement until GSPB wrote to the employee on 14 January 2019 informing him that his services would terminate with effect from 12 February 2019, as he had reached the agreed retirement age of 60. The employee, with the assistance of the MISA, referred an automatically unfair dismissal dispute to the Labour Court. The Labour Court held that a dismissal based on age is not automatically unfair in circumstances where the employee ‘has reached’ the normal or agreed retirement age. As the employee in this case had reached the agreed retirement age of 60, his dismissal was accordingly fair.

·       The employee’s argument - the employee appealed to the LAC, arguing that where an employee continues working after reaching the agreed retirement age and neither party relies on the fact that he has reached his retirement age, a new (second) employment contract comes into existence. It’s then impermissible for the employer to rely on the retirement age as per the first employment contract, as the relationship is now governed by the terms of a new employment contract. Therefore, any dismissal based on age will be automatically unfair, unless the employer can prove that the parties agreed on a new retirement age or there is a normal retirement age that applies to the employee. The employee contended that allowing an employer to rely indefinitely on an agreed retirement age months or years after the employee has reached that age effectively puts the employee at the mercy of the employer and is open to abuse.

·       The LAC’s findings - the LAC disagreed with this argument and agreed with the Labour Court. It held that section 187(2)(b) of the LRA is clear and unambiguous: a dismissal will be fair where the employee ‘has reached’ the agreed or normal retirement age, that is, where the employee has passed her/his agreed or normal retirement age. Properly construed, the section affords an employer the right to dismiss an employee fairly based on age, at any time after the employee has reached her/his agreed or normal retirement age. The court disagreed that this interpretation would leave employees vulnerable. The court confirmed that it would be impermissible for an employer to rely on section 187(2)(b) in circumstances where the employee’s age is not the real reason for the dismissal. Where, for example, the real reason for the dismissal is based on the employer’s operational requirements, then it would be open to the court to order the employer to pay severance pay.

·       Take-aways - this decision is in line with the balance of authority emanating from the Labour Court in recent years, including the decision of Solidarity obo Strydom and Others v State Information Technology Agency (SITA), where the Labour Court held that SITA could avail itself to the protection in section 187(2)(b) from the date that the employees reached their normal retirement age and at any time thereafter.

So, where an employee continues to work for an employer uninterrupted after reaching retirement age, the legal position is now clear: the employment relationship and employment contract continue, and the agreed or normal retirement age remains unchanged. The employer will then be free to dismiss the employee based on age at any stage thereafter by relying on section 187(2)(b) of the LRA.

This will be the situation unless it can be proven that a new retirement age has been agreed between the parties, or it is clear from the employer’s unequivocal conduct that it has waived its right to dismiss the employee after she/he has reached retirement age.

According to the LAC, this interpretation is consistent with the purpose of the section.

For Public Employees

For Government Employees they have the Government Employees Pension Fund (GEPF) which sets out as follows –

The GEPF provides for normal and early retirement, as well as retirement for medical (ill health) reasons. Members whose employment have been affected by restructuring or reorganisation are also able to receive retirement benefits. The types of retirement the GEPF provides for include -

1.         Normal Retirement - Sixty (60) years is the normal retirement age for GEPF members. The benefits paid depend on whether a member has less than 10 years’ pensionable service, or 10 or more years of pensionable service. Members with less than 10 years’ service receive a gratuity – a once-off cash lump sum that is equal to their actuarial interest in the Fund. Members with 10 or more years’ service receive a gratuity and a monthly pension annuity.

2.         Early Retirement - under certain circumstances, members may retire early, that is before reaching the normal retirement age of 60. Again, the member’s years of pensionable service determine the benefits. Members with 10 or more years of service receive annuities and gratuities. These are calculated in the same way as for normal retirement, but with a reduction of a third of one percent (0, 33%) for each month between the dates of early retirement and normal retirement.

3.         Ill health and other retirements - enhanced benefits are paid when members retire for medical reasons, when injured on duty, or when their posts are abolished through organisational restructuring. In these circumstances, members receive both annuities and gratuities if they have more than 10 years of pensionable service. For members with less than 10 years pensionable service, the benefit will be consistent with and not less than the resignation benefit. Members with more than 10 years’ service are also paid an annual supplementary amount.

This remains unchanged.

But People Are Living Longer

It’s clear to just about everyone that things nowadays are very different to how they were in say the 1940’s or even the 1900’s. Medicine has come a long way and people – for the most part – are living far beyond the average life expectancy - which according to Macrotrends, the world life expectancy for 2025 is currently sitting at 73.49 years, a 0.23% increase from 2024.

In fact, Vitaly Kovalyov, a leading specialist at the Volgograd State Medical University project office and host of the BioPolitics channel has been quoted as saying that –

“The first people who will live to 150 years have already been born. The centenarians of the future are already among us. There's is every reason to believe that the first people who will live to 150 have already been born. Perhaps they're now 20, 30, or even 40 years old”.

And then if we look at an article from Investec, titled Exploring retirement age in South Africa: Who decided on 65? Where they set out that the financial position around retirement is that the generally accepted industry norm is that you should spend two-thirds of your life in the accumulation phase saving for retirement, and a third in drawdown. Does that then not mean that if you go on to live to 125 and you started working in your mid-20s (on average), surely you should then consider retiring only at 90 years old?

The plan of early retirement at 55 (as set out by GEPF) is something of a fantasy.

Especially when one considers that – according to Investec - only 5% of SA's population are able to retire and maintain their standard of living.

The decision of when one retires becomes an ever-increasing important decision to make. If you haven’t already spoken to a financial advisor, it’s probably key in understanding whether you are financially able to retire. And then when.

Openly engaging with your employer on their retirement age may also be pertinent especially considering how much longer the world population is living.

We have taken the utmost care to ensure that the above information is correct, but we urge you to consult with a suitably qualified legal practitioner who will be able to answer any questions you may have on the retirement age or any other labour related issues you may have. In this regard, we would be more than happy to support you. Please feel free to contact us to see how we can best assist.

We are a law firm that considers honesty to be core to our business. We are a law firm that will provide you with clear advice and smart strategies - always keeping your best interests at heart!

(Sources used and to whom we give thanks – Daily Maverick; Bowmans; Investec; GEPF; IOL; MSN; SA Labour News; Macrotrends and Deccan Herald).      

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